Currency swaps allow firms to mitigate their exchange rate risk exposure between ________,while still making investments and raising funds in the most attractive locales.

Question

Quizplus · Accepted Answer

Currency swaps involve two parties exchanging cash flows that are denominated in different currencies. This enables firms to mitigate their exchange rate risk exposure between assets and liabilities, allowing them to still make investments and raise funds in the most attractive locales. Thus, choice A is the best option.

Currency Swaps Allow Firms to Mitigate Their Exchange Rate Risk